Volume 6 - Opinions of Counsel SBEA No. 42
Agricultural exemption (qualified lands requirement) (eligibility of acquisitions) - Agriculture and Markets Law, §§ 305, 306:
The two year requirement of sections 305 and 306 of the Agriculture and Markets Law applies to commercial agriculture use of the land but not ownership. A new owner of a parcel of land formerly used in one operation and eligible for an agricultural value assessment may apply for such assessment in the year following acquisition.
An owner who has acquired agricultural land which is to be used in conjunction with an ongoing venture where the acquired land had been used in commercial agricultural production for the two preceding years may also apply for an agricultural value assessment for such land, notwithstanding that such land did not satisfy one or more of the remaining statutory requirements under its former ownership.
Our opinion has been requested as to whether certain land may be eligible for an agricultural value assessment if acquired for use in conjunction with agricultural land eligible in its own right for an agricultural value assessment (Agriculture and Markets Law, Art. 25AA). The acquisition is in two parts, one consisting of 4 adjoining woodland acres, the other consisting of an adjacent 23 acre farm which previously had been in agricultural production for an extended period of time (although not eligible for an agricultural value assessment).
Article 25AA contains a requirement that otherwise qualified land must have “been used in the preceding two years for the production for sale of agricultural products of a gross average sales value of ten thousand dollars or more” (§§ 305 and 306). This requirement refers to the land, not ownership; the only requirement as to ownership is that application for exempt status must be made by the owner of otherwise qualified land.
Sections 305 and 306 of the Agriculture and Markets Law essentially provide that agricultural land may qualify for an agricultural value assessment, upon application by the owner, where the land (1) consists of not less than ten acres, (2) has been in commercial agricultural or horticultural production for the preceding two years, (3) has produced for sale a defined agricultural product or products with a gross sales value of $10,000 per year averaged over the two preceding years, and is (4) either located within an established agricultural district or subject to an individual eight year agricultural commitment.
Lands previously unused for commercial agricultural production or primarily used for a purpose other than commercial agricultural production cannot be immediately eligible (see, e.g., 3 Op.Counsel SBEA No. 97 and 4 Op.Counsel SBEA No. 23). Accordingly, lands previously unused for agricultural production, although acquired for use in conjunction with an ongoing agricultural operation, are not eligible because they have not been used in commercial agricultural production for at least two years preceding application. Thus, as to the first acquisition, absent a clear indication that the four wooded acres had been actively used in a commercial agricultural venture for two years prior to acquisition, the wooded acreage would not be eligible for an agricultural value assessment.
As to the second situation, we assume that the 23 acre farm has been used by its former owner as an independent commercial agricultural unit for the prior two years or more to produce agricultural products with an average gross sales value of at least $10,000 annually. In this case, whether the acquired acreage was a separate venture or whether it was used in conjunction with an ongoing operation would make no difference as to its eligibility, since the essential statutory requirements (acreage, use, gross sales requirement of agricultural production) are satisfied. Thus, the land would be eligible for an agricultural value assessment.
If, on the other hand, the former owner had not qualified the land because the land had not satisfied the gross sales requirement, and the present owner acquired the land to be used in conjunction with his ongoing agricultural operation, which satisfies the requirements of Article 25AA in its own right, the acquired land may nonetheless be eligible for an agricultural value assessment. As indicated, otherwise qualified land must have been used in agricultural production for the preceding two years and must have produced agricultural products of a gross average sales value of $10,000 or more. The law does not directly address the issue of change in ownership nor the consequence of acquisitions to be used in conjunction with an ongoing agricultural use. Nor, of course, does the statute address the question of the eligibility of land which, although formerly used in agricultural production, does not satisfy all of the requirements (e.g., less than 10 acres, less than $10,000 gross sales value). We believe, however, that the reasonable interpretation in such case is that the acquisition, particularly when small parcels are acquired, may be considered eligible for an agricultural value assessment. We recognize that a determination will have to be made on a case-by-case basis, and in each instance the owner will be required to sustain the burden of establishing that the acquired land had in fact been actively used in commercial agricultural production for at least the prior two years.
March 30, 1979
